Some members of the AdViewGlobal (AVG) autosurf say they received no paper profits for surfing yesterday. For weeks, members have complained about “low” payouts, not “no” payouts.

Concern now is spreading about the complete absence of payouts yesterday. Some members, however, are saying that complainers have to understand that payouts never were “guaranteed.”

AVG is awash in a sea of incongruities. On one hand, the surf has released a forward-looking promotion that suggests members can earn back the money they spend on “advertising” — plus a profit of 10 percent — in the first six months of membership.

On the other hand, however, current members are grumbling about minuscule payouts — and, now, no payouts at all.

The no-payout development came on the heels of a PowerPoint presentation AVG released that advertised a conversion rate “in the neighbourhood of 37 percent,” a claim that implied the rate could be achieved across-the-board, regardless of the nature of the product, the quality of the audience, the state of the economy, pricing and other variables.

Under the conversion claim, an “advertiser” who pitched free doughnuts could expect 192 conversions out of each 519 AVG visitors. An “advertiser” who sold doughnuts for $10,000 each also could expect 192 conversions out of each 519 visitors.

“Advertisers” could expect to “garner” the rate as long as their sales copy didn’t “suck,” AVG said in the presentation.

The presentation included a “case study” that incorporated events that had not happened and concluded with an AVG surfer “on the beach” two years from now enjoying his success.

One AVG promoter complained that this Blog’s reporting on the PowerPoint presentation was unfair, saying the promotion was “not complete and is still being polished.” The member explained that the presentation was released because promoters were eager to have a new sales tool, but did not explain why AVG ever would release a tool prematurely, especially when the tool paints a rosy picture despite the fact current members are complaining about major problems within AVG.

AVG provided no context and no proof of its 37 percent conversion claim — a claim that was at odds with a separate claim of a “10%” conversion rate elsewhere in the presentation. The 10 percent claim was punctuated with an exclamation point, even though it was 27 points lower than the incredible, 37 percent claim.

Any person who achieved the lower conversion rate reasonably could ask why he hadn’t achieved the higher one — and why the 10 percent rate was something to celebrate with an exclamation point when the advertiser’s ad had underperformed the standard claim by a misery factor of nearly four to one.

Conversion rates vary wildly, as does the definition of a successful conversion rate. Depending on the nature of the product, pricing, market conditions and other variables, some advertisers would celebrate a conversion rate of 1 percent or even lower. A 37 percent conversion rate — especially if the implication is that it can be achieved across-the-board — is absurd on its face.

AVG Members Want Thieves Identified

Meanwhile, amid reports that some members had stolen from the company by abusing a member-to-member button AVG had provided, some members have called for AVG management to identify the thieves.

Earlier this month, an AVG promoter described a strategy by which prospects could pay upline sponsors directly for the purchase of ad-packs, which AVG calls “page impressions” or “viewer impressions.”

Under the strategy, the prospect would pay the sponsor directly, instead of paying AVG. The sponsor, in turn, would deposit the money into his private bank account. In the next step, the sponsor would send a check by overnight mail to payment processors either in Canada or Panama.

Alternatively, the sponsor could use his bank’s wire facility to route his prospect’s money to the offshore processors.

Once the processors received the money, the sponsor would instruct them to wire it to AVG. Once the money reached AVG, the sponsor would use it to fund his own account, and then use AVG’s internal system to distribute it back to the prospect.

At the same time, members have complained that promoters were misusing the button to siphon windfall profits through a process known as “stacking” — thus the call for AVG to identify the cheaters.

There were calls yesterday for AVG to reclaim the money promoters who cheated were paid. How the surf intends to proceed is unclear.

Some members pointed out that AVG itself provided the member-to-member button, saying that members who used it to their advantage had done nothing wrong and simply were taking advantage of a tool the surf had provided.

AdSurfDaily, a Florida company with close ties to AVG, which purports to be based in Uruguay, had problems with massive internal theft, federal prosecutors said in December.

In one case outlined by prosecutors, more than $1 million purportedly was stolen from ASD by Russian “hackers.”

ASD President Andy Bowdoin never filed a police report, despite the huge theft, prosecutors said. In fact, they added, Bowdoin ignored other thefts, too, because he knew that calling the police could expose ASD to the scrutiny of law enforcement.

Prosecutors said Bowdoin had set up ASD so family members and insiders actually could benefit from theft. In one instance, prosecutors said, ASD paid an employee to surf for Bowdoin’s son, who received rebates for having performed no work.

Bowdoin and family members later set up a separate company, using ASD proceeds to do so, prosecutors said. The separate company was used to retire the $157,000 mortgage on the home of Bowdoin’s stepson, who is a trustee for AVG.

Whether AVG will call the police to report the purported thefts by insiders is unclear.

And the company may face another problem: If AVG tries to reclaim money from promoters who took advantage of a member-to-member button the company itself provided, it is possible that the promoters themselves would consider the action a matter for law enforcement to investigate.

Jurisdiction also is fuzzy. AVG purports to be based in Uruguay, but recently issued a news release with a dateline of Tallahassee, Fla.

Sicilian: Iâ€™d also like to see if anyone bought that $100,000 advertisingâ€¦.You ever had a Halloween where youâ€™ve run out of candy but the kids keep showing up with their bags open?Thatâ€™s what the â€œback officeâ€ at AVG is like right about nowâ€¦â€¦â€¦â€¦

That’s an apt analogy and usually when you wind up with flaming poop on your doorstep or your house egged later. It’s not nice to disappoint Trick or Treaters. The trick is on those who joined….unless CORRECTION is going to personally make everyone whole again.

Remember back to the Article of June 3, and CORRECTION demanind a retraction? Well, one of CORRECTION’s claims was this, and I quote from two separate posts: “Ad packs, which do not exist in AVGA, could not be transfered if they did exist.” and then this one: “You cannot move â€œad packsâ€ inside the AVGA customer base.”

With the recent events inside AVGA with the M-2-M button being abused, does this not prove the headline and comments were correct about AVGA and CORRECTION was wrong?

The one bad thing about running a scam is you have to keep remembering all the lies you have told. Fortunately they can’t.

When will you people grow up and learn that not everything out there is a Scam just because the government doesn’t want everybody to work from home doesn’t make it right to tell everybody that this is a Scam. People you need to understand that any company is allowed to share their revenue if they so choose to. This a Decision that the company has chosen to make. They never once said that they will share at rate of 1% to 8% it has always been 0% – 8%

This means that if I have 100000 Page Impressions and the daily revenue share is calculated at 0.50% this is the same as a Bank Charging this interest based on how much credit you have used. The difference is that the Bank Charges you Interest. With AVGA they share their company revenue based on that daily percentage. Its the same for everybody no matter if you have 1 million Page Impressions or 100 Page Impressions its like the same as a Credit Card except instead of charging you on the amount of Page Impressions they use this to calculate your piece of the pie.

Clicking “page impressions” for money is not working from home you ignorant Muppet. Real at home jobs are medical transcriptions, legal data entry, etc. No “clicking your way to financial freedom with Pina Coladas on the beach……”

I hope the feds can trace the IPs of who posts comments and they go after all these schmucks promoting this nonsense.

I am certain that you know that AVG is a scam, but humor me and answer me this from a pro-AVG viewpoint. If in fact AVG were sharing its revenue equally and fairly with all members, one could construct a legal business model. However, AVG pays off old members with new member money, while said new members get nothing (until they in effect graduate to become old members). That part of the business model is illegal. Your response?

PS: You are correct in your twisted logic wrt the government supposedly not wanting people to work from home not equating to AVG being a Ponzi (your “logic” is a logical non sequiter — you just cannot link unrelated concepts together, as in “It’s raining, therefore AVG is not a Ponzi”). AVG is a Ponzi for several other clear, distinct, valid reasons……

Truthful: When will you people grow up and learn that not everything out there is a Scam just because the government doesnâ€™t want everybody to work from home doesnâ€™t make it right to tell everybody that this is a Scam. People you need to understand that any company is allowed to share their revenue if they so choose to. This a Decision that the company has chosen to make. They never once said that they will share at rate of 1% to 8% it has always been 0% – 8%This means that if I have 100000 Page Impressions and the daily revenue share is calculated at 0.50% this is the same as a Bank Charging this interest based on how much credit you have used. The difference is that the Bank Charges you Interest. With AVGA they share their company revenue based on that daily percentage. Its the same for everybody no matter if you have 1 million Page Impressions or 100 Page Impressions its like the same as a Credit Card except instead of charging you on the amount of Page Impressions they use this to calculate your piece of the pie.

Truthful: People you need to understand that any company is allowed to share their revenue if they so choose to.

Surely then that makes it an investment vehicle, like companies that pay dividends on shares, and therefore requires SEC registration?

Working from home would require an activity that provides a real service or product. Clicking on ads (or Page Impressions, or whatever you want to call it) is providing a low value service. Just like ASD, the ads are not targeted, and any 6 year-old can do the “work”.

this is the same as a Bank Charging this interest based on how much credit you have used.

Banks are licensed and regulated to charge/give interest. Is AVGA licensed to charge/give the “interest”?

If the VIPs were correctly called payment for services rendered viewing advertising, which is exactly what is happening, rather than revenue sharing, would that make a difference? I know, not likely but as you asked, humor me please.

It’s not unlike when a construction company pays electricians, carpenters and laborers to build a house. Days when the builders work they get paid. When they don’t work, they do not get paid. Just like in the advertising test platform model AVGA is now using. The contruction company almost always pays with money it collects from both old and new contracts. Workers get paid when the money is there.

Have you ever heard of a contractor waiting to get paid by his money for 90-120 days out? I sure have. Some owe me money right now in this horrid economy. Are they ponzis by your guidelines? It’s new money paying old obligations isn’t it? The VIP is payment for services…that means pay for work, not a return on an investment.

My compliments on a good, reasoned, rational post! The notion of providing a service, by viewing ads, is the best case made yet for any auto (or manual) surf…..

Of course, legal businesses have accounts receivable on an ongoing basis (accounts payable as well). That does not make them Ponzi schemes. Your example isn’t new money paying old members. As the work is performed, a ledger entry accumulates in the contractor’s accounts payable log. On a periodic basis, the contractor (hopefully!) will make payments. The granularity of this cash flow has been discussed in detail in the Black Box model (over short runs, every business looks unsustainable due to the variations in cash flow, if you pick the right time slice). AVG is different, but I’ll show you how to make it legal….

To your point, one thing that would make AVG legal is if they opened up the “pay to view ads” service to all comers WITHOUT requiring them to pay anything up front. That’s a pretty key difference. If the advertisers who buy ads with AVG truly just want the advertising, it does not matter who views the ads (well, they do want a target audience, but AVG in no way guarantees them the targets they want). Thus, the advertisers should be equally happy with any old person viewing the ads for a fee, correct? One of the problems AVG has is they collect money from the new members and distribute it to the old members who (in your words) are performing a service to the new members by viewing the new member ads. From the new member perspective then for ADVERTISING, they shouldn’t care whether it is old members or the public viewing the ads. It is the intrinsic tie between new member money getting paid to old members that yields the AVG illegalities. Open it up to the public, let everyone click on ads purchased by new members (say, first come, first served) and pay everyone (say) 50 cents per click, until all of the viewing that have been paid for have been used up, and you now have a legal model. In this model, everyone, including the new member, could provide a service to the new member by clicking on the new member ads. Of course, the old members wouldn’t get rich this way, or get more back than they put in (the public would quickly rush in to view ads at 50 cents per 15 second viewing), but at least it would be legal……you could even have 1st and 2nd level referral fees, like many MLM programs, and still keep it legal. You simply cannot restrict payouts to only old members, with the money coming from the new members. That’s not legal, whether you like it or not.

Correction: Entertained,If the VIPs were correctly called payment for services rendered viewing advertising, which is exactly what is happening, rather than revenue sharing, would that make a difference? I know, not likely but as you asked, humor me please. Itâ€™s not unlike when a construction company pays electricians, carpenters and laborers to build a house. Days when the builders work they get paid. When they donâ€™t work, they do not get paid. Just like in the advertising test platform model AVGA is now using. The contruction company almost always pays with money it collects from both old and new contracts. Workers get paid when the money is there. Have you ever heard of a contractor waiting to get paid by his money for 90-120 days out? I sure have. Some owe me money right now in this horrid economy. Are they ponzis by your guidelines? Itâ€™s new money paying old obligations isnâ€™t it? The VIP is payment for servicesâ€¦that means pay for work, not a return on an investment.

You are way off track. A 6 year old could not do the “work” as you say. It is an adult activity by agreement with AVGA and you must be of legal age to work with the test platform. Now, any 6 year old could confuse investment income with pay for work, as you have. Anyone with a first grade education should be able to see the difference if they are not biased to start.

Consider this…the money does not come from new members. It comes from half of AVGA’s daily revenue which includes outside sales to non members. And the member is not guaranteed a penny, just to be paid for the agreed upon number of days. AVGA member/customers may well not get all of their Page Impression purchase back for the work they do. thjey joined the Association and agree to that up front.

Are you saying the money does NOT come from new members, or are you trying to rename the money coming from new members by calling it “half of AVGA’s daily revenue?” Critical difference…….I suspect that the vast majority of what you are calling “AVGA’s daily revenue” is in fact new member purchases/new member money. Doesn’t matter what you call it in that case. If I sell you heroin, and change the name to say that I am selling you talcum powder, I am still breaking the law…..

So, unless you are renaming new member purchases, I think you are implying that the overwhelming majority of AVGA’s revenue is NOT from new member purchases or from old members making new purchases, but rather from external sources. Now we are getting somewhere. Can you validate that information?

Also, why doesn’t AVG use the perfectly legal model I proposed, instead of one that I and many others (like the AUSA, DoJ, SS, Xavier, Eagle, PP, etc. ad nauseum)deem illegal?

Correction: Entertaind,Consider thisâ€¦the money does not come from new members. It comes from half of AVGAâ€™s daily revenue which includes outside sales to non members. And the member is not guaranteed a penny, just to be paid for the agreed upon number of days. AVGA member/customers may well not get all of their Page Impression purchase back for the work they do. thjey joined the Association and agree to that up front.

I can’t answer the money question specifically. I do not have access to the numbers. I do know that AVGA is generating outside income as we speak. That should be good news for everyone. And recent events show without question that nothing is guaranteed and no 125% threshold is there for prosecutors to repeat before a judge. Time will tell and I’m not making any predictions.

Correction: Entertained,I canâ€™t answer the money question specifically.I do not have access to the numbers.I do know that AVGA is generating outside income as we speak.That should be good news for everyone.And recent events show without question that nothing is guaranteed and no 125% threshold is there for prosecutors to repeat before a judge.Time will tell and Iâ€™m not making any predictions.

Time will indeed tell and the clock has been ticking for a while. Without people believing they are going to get their money back only the incurably insane are going to send that outfit any money.

Correction: Entertained,I canâ€™t answer the money question specifically. I do not have access to the numbers. I do know that AVGA is generating outside income as we speak. That should be good news for everyone. And recent events show without question that nothing is guaranteed and no 125% threshold is there for prosecutors to repeat before a judge. Time will tell and Iâ€™m not making any predictions.

How do you know that AVGA is generating outside income? Just because they say so, does not mean they do. Remember ASD and Andy saying there was outside income, and the faithful believed him. Then later found out it was all a lie. Besides to be legal, they had to have outside income day one; and we all know they didn’t. They were illegal when they started, and that makes them still illegal today. That’s like trying to claim you are partially pregnant. Since a person who has a first grade education can tell the difference, why can’t you?

I wouldn’t get too excited about it increasing from .001 to .004. Besides they have to keep the sheep happy or there will be more rumblings. You can’t have the membership upset and restless. Bad for business.

Correction, all this talk about 1st grade eduction is pointless if you insist on missing the point.

AVGA’s advertising rotator is not visible, I am told, to any other than paid members – reducing its viewing public to a very small number in relation to the inflated prices of the ads.

In order to be legal, AVGA advertising MUST have intrinsic value. The advertising must be able to stand alone as a service, without any rebates, viewing incentives etc etc. Viewing 24 ads is not working at home. Selling advertising on comission is work, but only if the advertising has real value.

In its present state, AVGA’s advertising has no more real value than that of any other closed autosurf and is no more than an unregistered investment. We have been through the same argument with ASD and, there were very few people who could put their hands on their hearts and say that their advertising brought in business to anything like the value of the adpacks that they held (most of which remained as unused credits) – and not all the advertising sucked – it just didnt get seen by enough interested people. But that wasnt the point of ASD anyway, was it? lol

If AVGA can produce advertising of sufficient visibility and spread to attract real customers to justify its excessive price, it still has to have sufficient outside revenue to avoid paying old members with new members money NOW and not in the future- which it seems unable to demonstrate that it has.

That is the only way it can avoid ponzi and unregistered securities charges.

And all that is quite aside from issues involving money laundering, wire fraud etc etc etc.

Correction: And recent events show without question that nothing is guaranteed

Under the “nothing is guaranteed” logic, any company that was running a Ponzi scheme and/or engaging in wire/mail fraud and money-laundering and the sale of unregistered securities could simply lower payments (or eliminate them) to achieve retroactive compliance and avoid scrutiny by the Feds.

Madoff could have walked under this logic by deciding to skip (or cancel) payments — and all previous wrongdoing would be wiped away. The Feds could have been hamstrung in their bid to seize Andy Bowdoin’s assets.

“Your Honor, we created a set of expectations, collected tons of money but then couldn’t address the expectations we created. So we slashed payouts and then eliminated them. We get to keep the money we collected. Do you have a problem with that?”

There are other issues, of course: The 37 percent “conversion” claim, for example. In addition to the SEC, such a claim could draw the attention of the FTC.

Or does Uruguay also protect AVG members from the FTC? (BTW, what happens if U.S.-based promoters are spreading the 37 percent claim?)

Good grief, Correction. GM is having trouble selling cars. If they spent $10,000 on AVG “advertising,” they could expect to sell 3,700 cars, under the AVG claim — as long as GM’s copy didn’t “totally suck.”

If the Cadillac division spent $10,000, it could expect to sell 3,700 Cadillacs priced at $50,000 each. Or the Chevrolet division could expect to sell 3,700 Aveo sedans priced at $12,685.

All of this, of course, would happen in a universe that includes fewer than 20,000 members — and it would happen in a universe without geographic targeting or demographic targeting or financial targeting.

But why limit GM’s spend to $10,000? If it spent $100,000, it would sell 37,000 cars — never mind that AVG couldn’t deliver the traffic.

Previously you mentioned the outrageous claim by ASD promoters that members’ money was insured by the FDIC and even commented about how excessive it was, but you seem not to be bothered by AVG’s claim of a 37 percent conversion rate in a universe that features no targeting.

And there also is the issue of the AVG claim that members can get their money back, plus 10 percent, in six months — and all prior claims by promoters, including the claim that registration in Uruguay keeps the SEC away.

GM could spend $100,000, have the pleasure of knowing the SEC was neutered, enjoy 37,000 car sales — and have a profit of $10,000 from the advertising alone. It could plow the $10,000 back into AVG, and sell 3,700 more cars.

Win-win. There would be no reason for GM ever to leave the AVG profit machine: Extraordinary car sales. Extraordinary six-month return on investment. No SEC hassles.

The AVG “button” issue is still out there, too. So is the issue about the wire deal that was announced — and then mysteriously taken away by AVG — after a company identified by AVG as a facilitator in the wire transfers denied it had any business relationship with AVG.

Andy Bowdoin’s stepson and the stepson’s wife are AVG trustees. Both of them are named in a federal forfeiture complaint as beneficiaries of illegal actions by ASD. Does that not bother you in the least?

BTW, do you know if any of the AVG founders were given the benefit of their old ASD accounts? The reason I ask is that some of the promotions by the earliest people in AVG suggested old ASD accounts might get ported to AVG.

This, of course, leads to questions about whether the AVG playing field is level and whether some of the insiders/founders have a better deal than the rank-and-file members.

Finally, you’re trotting out the “rebates aren’t guaranteed” argument. It’s basically an argument for a license to print money: Send us money. We may or may not pay you. If we don’t, we get to keep all the money.

Did you notice yesterday how quickly some AVG promoters fell back on “rebates aren’t guaranteed” when the payouts went missing for a day? And did you notice how quickly members who joined for the rebates (VIPs) became worried?

They RECOGNIZE the AVG fallback position — and it worries them sick, because they didn’t join to give AVG a license to keep their money. EVERY SINGLE PERSON who felt sick to their stomach yesterday is a potential AVG opponent. They joined with the expectation that they’d get back 100 percent, plus profit.

Oh, a former ASD executive also was an AVG executive. AVG announced his resignation March 20, saying he would stay on in “accounting.” On March 23, AVG announced its bank account had been suspended because too many members sent wire transactions in excess of $9,500.

Yes, wire transactions — followed by an account suspension.

How about all the Uruguay stuff, followed up by a news release with a dateline of Tallahassee, Fla? How about the reproduction of a Forbes’ logo in an AVG email pitch — you know, as if Forbes were endorsing a company it knows absolutely nothing about?

Watch what happens if AVG continues to suppress rebates, adds new rules to delay withdrawals and extends timelines for payouts to keep people surfing for months to have a prayer of getting back their initial spend — especially if ads aren’t converting at 37 percent.

AVG, at the moment, is turning its people into low-wage pawns. People desperate not to lose their money are clicking for pennies and holding on with prayers, all while cheerleaders who need to save face desperately are spinning things to give the pawns one more day of hope.

People will turn against people. Family will turn against family. Friends will turn against friends.

And all of it will happen so the earliest members and insiders can get their disproportionate shares — only to move on to the next one.

Letterman or Conan would have to think twice about using it in jokes because too much tragedy accompanies the comedy. People would laugh and then feel sick to their stomachs — sort of like the way some AVG members feel right now when they recognize they’ve become pawns and also have to deal with the the darkly comical cheerleading.

The Black Box says that the average AVG scammer will lose a minimum of 50% of their initial investment. The median return on investment is near zero (ie more than half of the fools who send their money in will get zero or close to it.) Since this is an illegal Ponzi, the people in the latter group (near zero return) will be the people who have joined near the end, i.e. recently. Of course, this could change if the AVG leaders decide to take their ill-gotten gains and buy some lottery tickets. If they then hit the $100 million plus jackpot, and then are so kind as to share it with their sheep, perhaps the losers will get close to breaking even….

I wish I knew the actual payout table for AVG. It would then be easy to see what the return was by summing up the daily payout during the eligible period, and of course that would scare off prospective sheep. In these Ponzi’s, the payout as you well know inevitably declines over time…..and quickly drops below 100% after the early insiders and promoters (like Watt) get theirs….

Pistol: So has anyone worked out how much money a member is likely to get back when the agreed number of days have passed and using the average daily payout up until now?Entertained?

The cash flows only speak to the mathematical sustainability, not the legality. Recall that if AVG started by paying old members w/new member moneythat they have already been operating illegally, even if in the abstract they are now operating legally. You can’t undo the illegality, just like a drug dealer taking his drug earnings and opening up a 7-11. Doing so doesn’t wipe out the drug dealings. (btw, there are other legal biz models that I have posted similar to what AVG is doing — none of them lead to the early members getting rich off of the later members though, so no one uses those models).

To your direct question, the sustainability question concerns the balance of cash flows over time. For simplicity, let’s treat the outside revenue as 100% profit, like a sales commission (doesn’t matter, but simplifies the analysis). If AVG “corporate” takes 50 cents of every dollar in revenue for operations and profits, all you need to do for mathematical sustainability is to have income equal to twice the outflow for rebates. Thus, AVG can be sustainable with NO outside revenue (and I know that comes as a shock), BUT with no outside revenue every member is more or less guaranteed to lose half of their investment. Effectively what happens is, a member sends a ddollar in, AVG takes 50 cents, and send 50 cents back to the member. What is ILLEGAL about this is that the 50 cents doesn’t go back to the original member, it goes to someone else higher up the pyramid. You HAVE to treat all members the same temporally.

A better question (and the one I think you are geting at) is how much external revenues (profits) are necessary for the average member to break even? Since AVG takes 50% of all revenues, your hypothesis is close. It isn’t 50 cents, it’s 50 cents divided by 50%, or one dollar for every dollar send in by members for ad paks/investments. If AVG had 10000 members who sent in $1000 each, and assuming NO 1st and 2nd level commissions, you’d need $10,000,000 in outside PROFITS in order to have the colllective membership break even. Even in that case, you still cannot temporally differentiate between new and old members. Everybody needs to share in the revenue pie in proportion to their investment. Unfortunately, AVG is not set up that way. The early members are favored when compared to the more recent members, and that is illegal…..

Correction: Entertained,What would you say if 50% of the revenue each day is from outside sources? How much is enough with your math? Seriouslyâ€¦Iâ€™d like to know.

Wow. Such a thoughtful and lengthy response. But read what you wrote Patrick, and look at your sources. Your information often comes from uninformed forum submitters. They are so off base it is unbelievable. You know, arguments can be made on both sides of this issue and nothing is ever settled when people just disagree and are using bad information as basis for fact.

By the way, that executive who left AVGA, as I understand it and I do not know Mr Talbert personally, he has a family member who is very ill and he decided to stay close to his loved ones and not move to South America. His reasons really are personal. Can we all respect that. So now you have something that you did not know about that situation that has nothing to do with some devious plan.

I believe, based on what I know, that AVGA is sustainable and legal based on what was said in Judge Collyer’s court in the ASD procedings. And the comments of AVGA “cheerleaders” are often affected by the desire to satisfy, necessary or not, the government’s standard for legal activity as presented in the hearing in Judge Collyer’s court.

I need to remember that you and the others here, and of course myself, already have a predetermined outcome in our heads. AVGA is going to make every effort to succeed where other have fallen short. I know I can rebut everthing you bring up to my satisfaction, but that will not change your opinion, and I’m not a spokesman for AVGA anyway. Can we agree on that?

Finally, I’m tired of the “he said she said” blogging. The facts will be written someday, and it will be a very different story than I’ve read on your blog Patrick. There’s too much rehash and speculation for me to continue commenting anyway. Time to move on then…thank you and goodbye for now.

Correction,
I am confused with you! Sometime ago you said you were discontinuing your blogs and not reading Patrick anymore. Now you are full bore again. Is this the result of training you received from being the most outspoken spokesperson for two of the biggest scam programs to hit the internet. I would be interested in knowing your position in both of these ponzi schemes. I am certain the Feds already know the answer and have you pegged into their data base .
If you don’t know it you can be ,and more than likely will be implicated as an accessory to these obvious violations of US Laws.Good luck in court.
See how the rats scatter when the curtain falls. You will be left all along to cover your attorney fees. As long as you suckers bring in the money you are great. When your day in court comes it is every person for themselves.Good Luck !!!

AVG is located in Uruguay, so they (and CORRECTION!) are not breaking any US laws!!! (Well, never minding ASD…..)

Private I: Correction,I am confused with you! Sometime ago you said you were discontinuing your blogs and not reading Patrick anymore. Now you are full bore again. Is this the result of training you received from being the most outspoken spokesperson for two of the biggest scam programs to hit the internet. I would be interested in knowing your position in both of these ponzi schemes. I am certain the Feds already know the answer and have you pegged into their data base .If you donâ€™t know it you can be ,and more than likely will be implicated as an accessory to these obvious violations of US Laws.Good luck in court.See how the rats scatter when the curtain falls. You will be left all along to cover your attorney fees. As long as you suckers bring in the money you are great. When your day in court comes it is every person for themselves.Good Luck !!!

Correction, what you havent been able to do is answer Entertained’s comment

The cash flows only speak to the mathematical sustainability, not the legality. Recall that if AVG started by paying old members w/new member moneythat they have already been operating illegally, even if in the abstract they are now operating legally.

AVGA is not behaving like an advertising company. It never has done. If you ever go near any advertising professionals you will know that they dont talk about VIPs or returns on advertising spending, OTHER THAN new business gained by the advertisers in exchange for their advertising dollars.

Some of us went into ASD a long time ago thinking that it was run by advertising professionals and that it had a scheme for residual earnings to go with it. By the spring of 2008, it had started to become clear to even those of us outside the US, that the name of the game was rebates, not new sales for our businesses.

With AVGA using a similar model to ASD and similar phraseology and the same people, it is clear from the start that this is not a “new style advertising company”. Somewhat late in the day a web/advertising company has been tacked on as an associate. That still does not make AVGA’s central function advertising. A closed view ad rotator to an audience of less than 1 million people at 1$ a shot does not make an advertising company. It makes an autosurf which is a business dealing in unregistered securities under the guise of advertising.

You cannot continue to plead ignorance, given all the hard legal and mathematical information available to you on the net. Or if you do, try to remember that ignorance of the law is not a defence in any criminal or civil proceedings that may be forthcoming

alasycia: By the spring of 2008, it had started to become clear to even those of us outside the US, that the name of the game was rebates, not new sales for our businesses.

And yet, you, amongst many others, continued to defend Bowdoin and ASD well after the August flower shop raid.

You cannot continue to plead ignorance, given all the hard legal and mathematical information available to you on the net.Or if you do, try to remember that ignorance of the law is not a defence in any criminal or civil proceedings that may be forthcoming.

Entertained: but-but-but Pistol,AVG is located in Uruguay, so they (and CORRECTION!) are not breaking any US laws!!! (Well, never minding ASDâ€¦..)

Private I: Correction,I am confused with you! Sometime ago you said you were discontinuing your blogs and not reading Patrick anymore. Now you are full bore again. Is this the result of training you received from being the most outspoken spokesperson for two of the biggest scam programs to hit the internet. I would be interested in knowing your position in both of these ponzi schemes. I am certain the Feds already know the answer and have you pegged into their data base .If you donâ€™t know it you can be ,and more than likely will be implicated as an accessory to these obvious violations of US Laws.Good luck in court.See how the rats scatter when the curtain falls. You will be left all along to cover your attorney fees. As long as you suckers bring in the money you are great. When your day in court comes it is every person for themselves.Good Luck !!!

And yet, you, amongst many others, continued to defend Bowdoin and ASD well after the August flower shop raid.

Yes Pistol, we know that – I was dumb enough not to understand that the math didn’t work and that it wasn’t legal. As you well know, as you have read it a hundred times and I believed all the crap about Bowdoin being a successful business man until a couple of weeks after the raid. Then I understood that Bowdoin was not what he said he was and that we had been conned, and later, thanks to some of the more pleasant scambusters who had the patience to explain it, understood why it was unsustainable and illegal. Thanks for the reminder, just in case anyone had forgotten. LOL

We live and learn. And strangely enough, I, along with many others, had enough information by the time that AVGA and the other ASD copycats started up to know to avoid them like the plague – as did Correction.

So for that reason it would be interesting to see what Correction has to say in answer to the post made to him.

A pay per click model can only be legal if the pay is based upon the number of clicks only, and not tied to the amount of “upgrades” that the person doing the clicking is signed up for. Therefore, for the clicking to be a legitimate “service”, the person who has $10 in must be paid the same per click as the person who has $10,000 in. If you stray from this simnple principle, it becomes a security because your payments are based not upon what you are doing, but what you have invested. That makes it a security, and makes AVGA guilty of selling unlicensed securities. Twist it any way you want, but them’s the facts.

“And I, too, believe that nicotine is not addictive.” — Donald Johnston, president and chief executive officer, American Tobacco Co., April 14, 1994

“Mr. Congressman, cigarettes and nicotine clearly do not meet the classic definition of addiction. There is no intoxication.” — James Johnston, chairman and chief executive officer, RJ Reynolds Tobacco Co., April 14, 1994

“Moreover, nicotine is addictive. We are, then, in the business of selling nicotine, an addictive drug effective in the release of stress mechanisms.” — Brown and Williamson Tobacco Co., internal memo, July 17, 1963

** The memo, which was written a year prior to the famous 1964 report by the U.S. Surgeon General on the dangers of smoking, was almost 31 years old when the tobacco executives testified in 1994 that they believed nicotine was not addictive.

** A 1964 internal memo by Philip Morris suggested one way the tobacco industry could deal with fallout from the Surgeon General’s report was to hire shills to cloud the issues, make light of the report and try to find friends in the media.

** The same 1964 Philip Morris memo said the industry needed to “provide some answers which will give smokers a psychological crutch and a self-rationale to continue smoking.”

** The very same memo suggested the industry should position the product as something good for mental health. This spin strategy seized on a finding by the Surgeon General that smoking helped certain people relax.

** All seven tobacco executives quoted above were out of the industry within two years of their testimony.

** Audiences regularly laugh out loud when shown video of the 1994 Congressional testimony by the tobacco executives. The executives had a story, however bizarre and unbelievable, stuck to it — and then got pilloried in the movies.

BTW, Correction, you know there is at least one proffer letter in the ASD case, right?

And you know the government filed the second forfeiture complaint against ASD’s assets when AVG was in prelaunch with a lot of ASD members in tow, about a month after Judge Collyer’s ruling that ASD had not demonstrated it was a legal business, right?

I’m wondering: Do you think there could be more than one proffer letter in the ASD case?

You haven’t heard any reports about AVG members who also were ASD members getting bank accounts seized, have you?

Correction: Your information often comes from uninformed forum submitters. They are so off base it is unbelievable.

To have so many “uninformed” forum posters doesn’t speak well for AVG as a communications enterprise now, does it?

Just another incongruity, especially with the company now claiming it can help other companies shape their messages.

How to you think “Main Street” and Fortune 500 advertisers will react to the 37 percent conversion claim — by running like there is no tomorrow so as not to poison their brands or by establishing an account with SolidTrustPay or StrictPay so they can send AVG a boatload of cash through Canada or Panama to Uruguay?

Gregg Evans: A pay per click model can only be legal if the pay is based upon the number of clicks only, and not tied to the amount of â€œupgradesâ€ that the person doing the clicking is signed up for.Therefore, for the clicking to be a legitimate â€œserviceâ€, the person who has $10 in must be paid the same per click as the person who has $10,000 in.If you stray from this simnple principle, it becomes a security because your payments are based not upon what you are doing, but what you have invested. That makes it a security, and makes AVGA guilty of selling unlicensed securities.Twist it any way you want, but themâ€™s the facts.

I thought it was the Howey test that determined whether something was a security or not?

It would be nice if you would lighten up on alasycia. She has seen the light and is on our side now, as opposed to CORRECTION!, who has not seen the light. refuses to look at the light, and is not on our side.

The Howey Test is from a court case that determined one thing was a security, and if you meet the standards set out in Howey, you absolutely are selling securities, but there are other cases and standards that also apply, such as the one conditions I posted. In an abstract way, my conditions are an extension of Howey standards, because they tie returns to contributions.

The more I ponder this, (and I’ll find the place where I got it if I can recall it) my conditions stand up in prosecutions because they separate the rebates, profit sharing, what have you, from the “work” people try to rationalize they are doing for their “pay”. If the payments are for “viewing ads” then there is no rational explanation of why surfer X who “invested” $10 is paid any less than surfer Y who “invested” $10,000. The payments being based upon contribution makes it a security and effectively rebuts the claim that surfers are paid to view ads. Clearly, they’re not, they’re paid a “return on investment” in fact, which leads right back to Howey.

Gregg Evans: A pay per click model can only be legal if the pay is based upon the number of clicks only, and not tied to the amount of â€œupgradesâ€ that the person doing the clicking is signed up for.Therefore, for the clicking to be a legitimate â€œserviceâ€, the person who has $10 in must be paid the same per click as the person who has $10,000 in.If you stray from this simnple principle, it becomes a security because your payments are based not upon what you are doing, but what you have invested. That makes it a security, and makes AVGA guilty of selling unlicensed securities.Twist it any way you want, but themâ€™s the facts.

I thought it was the Howey test that determined whether something was a security or not?

My notes on the statements I made above seem to point back to the consent decree that either Charis Johnson signed or the original complaint against CEP, that period predates my current computer and I’ll have to go basement diving to find the origin. Either way, neither is a court decision, so there is no Stare Decisis as Howey has, but as the SEC authored it in whichever case it was, it’s at least a position that the government feels good enough about to be prepared to litigate it.

Martin: Hey Pistol,
It would be nice if you would lighten up on alasycia.She has seen the light and is on our side now, as opposed to CORRECTION!, who has not seen the light. refuses to look at the light, and is not on our side.

It would seem that Patrick does any lightening up on Alasycia and others that he deems necessary on my behalf. The odd post of mine has been disappearing of late despite there not being any bad language, racist remarks etc, etc. To me it kind of smacks of the tactics employed by the surfs up forum and its ilk. But then it is Patricks house so he is entitled to run it as he pleases.

I just hope he would never be tempted to delete anything directed at me, without, at least, me being able to read it first, as I like to see what people are saying about me, no matter how bad and like the chance of being able to answer my critics. That is only fair, I think.

Pistol: I thought it was the Howey test that determined whether something was a security or not?

You could have asked the straightforward question above the first time.

Instead, you wrapped it in a blanket of meanness, and then supplemented it with a separate post that prompted readers to visit your website, so you could show them a mean video you made.

You, of course, know it is not censorship, although you continue to assert disingenuously that it is. The reason I know that it is disingenuous is that you previously have impressed me with your intelligence. In other words, you are too intelligent to argue disingenuously, unless you’re deliberately being disingenuous.

So, once again you make work for me — and then follow it up with a passive-aggressive remark that it is my house and I can do what I want.

I more or less have arrived at the conclusion that you prefer meanness and that there is no way to communicate with you in a productive way.

I have tried — and failed — to appeal to the better angels of your nature. The commercials you make for meanness will be deleted.

Gregg Evans: My notes on the statements I made above seem to point back to the consent decree that either Charis Johnson signed or the original complaint against CEP, that period predates my current computer and Iâ€™ll have to go basement diving to find the origin.Either way, neither is a court decision, so there is no Stare Decisis as Howey has, but as the SEC authored it in whichever case it was, itâ€™s at least a position that the government feels good enough about to be prepared to litigate it.Well, a little digging, and there is is, the SEC complaint in SEC Vs. CEP TRUST, at paragraph 23 and 25.http://www.sec.gov/litigation/complaints/2007/comp20191.pdf

Well, I should first of all say that I already said that you had made it perfectly clear but I thought you were mistaken. Patrick, though decided in his wisdom that I was being mean and deleted the post.

Right, now that is out of the way I shall try to address your last post without being disingenuous or mean.

I presume this is what you refer to?

“The Investment Nature of the CEP Investment Program

23. The purchase of a CEP membership constitutes an investment contract because the receipt of payment from CEP is dependent upon a member’s funding his or her account, and not on his or her provision of services.
24. CEP is a passive system. Members are only required to place funds into the program. Management undertakes all activities to invest these funds.
25. The amount of returns that CEP pays to its members are dependent solely upon how much money they put into the program, not on the amount of service they render to CEP.

I surely do not need to point out to a student of law that the bit you referred to in your original post is the third part of a three part reason given for CEP being a security. I doubt that that one reason would be sufficient to classify it as a security as stated by you in your post on this matter. I quote: “it becomes a security because your payments are based not upon what you are doing, but what you have invested.”

I also need hardly remind you that the Howey test is three pronged.

“Under the Howey Test, an interest will be classified as a security only if the following three elements are present:

*
an investment of money has been made,
*
in a common enterprise and
*
the investor has the expectation of profits, which profits are expected to arise solely, or substantially, from the efforts of the promoter or third party.”

Presumably that means if only one or two elements are present it isn’t a security.

Well now over in AVGA land they cannot do cashouts on their “new” card. Only put money into the scam. Along with no one from management will answer their questions regarding the fees ect.
They are still complaining about low VIPS.
The only word from T. is about the daily trainings and by the sounds of things, they aren’t so hot either.
Correction, how come things are so mucked up when they supposedly learned valuable lessons from ASD?

I think they learned their lesson well. Determine when it is that you have collected sufficient funds to live comfortably on the rest of your life, start making excuses/noises about why payouts are dropping off or not occuring at all, and then run for the hills (or Uruguay). Bowdoin is quite likely to eventually spend his remianing days behinnd bars, and it is likely that several insiders will keep him company. The AVG gang may yet escape criminal justice, and perhaps civil justice as well if they split now…..

Cathy G.: Well now over in AVGA land they cannot do cashouts on their â€œnewâ€ card. Only put money into the scam. Along with no one from management will answer their questions regarding the fees ect.They are still complaining about low VIPS.The only word from T. is about the daily trainings and by the sounds of things, they arenâ€™t so hot either.Correction, how come things are so mucked up when they supposedly learned valuable lessons from ASD?

Cathy G.: Well now over in AVGA land they cannot do cashouts on their â€œnewâ€ card. Only put money into the scam. Along with no one from management will answer their questions regarding the fees ect.

Yes, there has been much confusion about the “new” card and about AVG debit cards in general.

As you point out, members are complaining about “low” VIP payouts and, apparently, having to pay a fee to get a card that permits them to pay AVG but not withdraw “earnings.”

The shorthand, as it appears at the moment, is this:

Pay us $30 to get a card that permits you to pay us for your “advertising.” As things stand, you can’t withdraw on the card and there may be other fees, but we’ll announce those later — or not.

Sorting through the issues is not the easiest thing because cheerleaders are insisting that members should not be asking what AVG can do for them, rather what they can do for AVG.

This seems to include promoting a 37 percent conversion rate on “advertising” so prospects will dump money into AVG via SolidTrustPay and StrictPay, and later gain the right to surf for “low” VIPs and the accompanying right to pay AVG $30 for a debit card that can be used to pay AVG but not withdraw from AVG — with the prospect of additional fees, of course.

Presumably that means if only one or two elements are present it isnâ€™t a security.

No, it doesn’t mean that, and quit trying to twist it around so. You’re just plain wrong. If it meets all three of the Howey conditions, it is a security, and the court won’t even allow you to argue otherwise for the most part,. But not everything classified as a security must meet all three conditions, it’s just not so cut and dried, and you can attempt to argue the point. And I think you’re being a bit more than a little obtuse about it.
I, in this instance and in general, write about things in ways I’d never try to write for say, a paper written for school. My audience there is a law professor and in blogs I have to try to explain things I usually assume the retired Federal Judge who teaches the class I’m now taking can get the gist of. For the same reason, I feel safe writing things on blogs that are for the most part correct, but if you’re a nitpicking assclown you can point to things that may need an asterisk, cause they’re right but the answer is not always simple. For instance, when you are paid a fee for an activity, it’s in a broad since “salary, wages, tips or other compensation” but when you get paid something based on a money contribution you made, and not on something you did to contribute, that’s broadly called “investment income” and most (but not all) investment income that is in opportunities solicited to the public at large (and the legal meaning of that is well defined also, if you have 10 pages or so I’ll be happy to provide it) it’s a security. There are, according to my handy reference software upwards of 250 legal definitions of the term “Security” that apply, Howey is one of them, the one even peckerwoods like you know, but it’s not by a longshot the only one.
Of course, I’m just a student, so I can’t give “legal advice”. And the comments I give are free, so you’re more than welcome to ask for a refund. I have found that a lot of people appreciate what I write, and I’m not going to stop. You and my good buddy convicted felon Bob Guenther seem to be the only ones I am aware of that are actually offended by it, and while I can see why he doesn’t like me calling him a crook, I have never been able to figure out exactly what it is that makes you obessesd with me. You claim to be against the scammers, so am I. You take the position that people who once dabble in any scam are forever danmed, a position I don’t agree with, but I’ve never been a member nor promotor of any scams, with 2 exceptions, I did contribute $10 each to two autosurfs solely in order to gain legal standing, I have not withdrawn a dime either time.
In short, if you don’t like what I write, I don’t care. I’m not writing it for you. If you want Law Review quality writing hire yourself a legal researcher, something I would be happy to do for you at my regular rate, which is quite high for legal research but have at it. And if you have a problem witht he fact that I’ve made a few dollars along the way, well, grow up. I didn’t do it running ponzi schemes, it was perfectly legal and I paid my taxes. If you’re poor that’s not really my problem.

Pistol: â€œUnder the Howey Test, an interest will be classified as a security only if the following three elements are present:
*
an investment of money has been made,
*
in a common enterprise and
*
the investor has the expectation of profits, which profits are expected to arise solely, or substantially, from the efforts of the promoter or third party.â€
Presumably that means if only one or two elements are present it isnâ€™t a security.